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Article

How Can You Build an Innovative Culture?

Paul Sloane

USA

Imagine that you are the newly installed CEO at a company which has done well in the past but is now complacent, stodgy and risk averse. Agile competitors are threatening and you have identified that you need to change the culture to be more adventurous, creative, entrepreneurial and innovative. What should you do?

Some of my clients are in this kind of situation and there is no doubt that it is a tough challenge. Here are ten ways you might tackle the issue.

1. Communicate a compelling story. The CEO must paint the vision, sell the need for change, set the strategic direction and then communicate, communicate, communicate. Communication is the foundation for change. It is essential but not sufficient. It will not in itself change cultures or behaviors. As Lou Gerstner who turned around IBM puts it in his book, who says Elephants Can't Dance? – people don't do what you expect, they do what you inspect.

2. Set Goals and Targets for the key things you want achieved – including innovation. Give people objectives e.g. the number of innovative ideas championed or the number of new initiatives implemented or the number of prototypes put on trial. Monitor progress against innovation metrics. Put them on your balanced scorecard.

3. Publicly recognize risk-takers. Single out those who tried new initiatives for reward and recognition – especially if they failed. This is one of the most powerful ways to reinforce the message that we want to manage risks and we should not fear failure.

4. Focus on the customer and the market - not on internal politics and procedures. Lead by example – visit customers and encourage many more of the top people to do so and to return with ideas for improving customer service and meeting unfulfilled needs.

5. Deliberately break procedures and processes that need replacing. Make a show of slaughtering some sacred cows. Close down long-standing committees and regular meetings that have become redundant and bureaucratic. Demonstrate that change is necessary and welcome.

6. Encourage everyone to question how things are done. Get them to challenge processes and rules by asking questions like, 'How can we serve our customers better? How can we delight our customers? How can we become easier to deal with? How can we beat the competition?'

7. Push decision making down closer to the action wherever possible. This involves taking some risks but it is well worth doing if people feel trusted and empowered. You will get faster decisions. Some decisions will be wrong but you can manage this process with good supervision and communication.

8. Throw down challenges for ideas in areas where original proposals are needed. Have suggestions challenges or ideas events targeted at key issues. How can we reduce cost? How can we improve service? How can we halve our inventories? Put your own energy, enthusiasm and time into participating and wherever possible implement the good ideas that people generate.

9. Get the organization looking outwards not inwards. As well as focusing on customers encourage links and communication with other leading companies in the area, with Universities, with Industry bodies and with networking organizations. Look outside for ideas that you can copy. Proctor and Gamble has a VP of External Innovation whose job it is to source innovations from outside the company.

10. Finally if you have some diehards who do not buy the new approach, who are wedded to the old ways of doing things, who remain cynical or negative about the new initiatives then bite the bullet. Fire them. One bad apple can hold back a whole department. Getting rid of the poison will energize the rest of the body.

Changing a deep-rooted corporate culture is amazingly difficult. It takes long and continued effort. There are many people in the organization who are comfortable with the current set up and resistant to change. Leaders have to appeal to emotions as well as logic in selling the benefits of change and in showing the risks and drawbacks of not changing. With their actions and words they must cajole, encourage, evangelize and recruit people to join in a journey of risk, adventure and discovery.

Paul Sloane is the author of ten books on lateral puzzles, creative problem-solving and lateral leadership. He is the founder of Destination-Innovation, a consultancy that helps organizations improve innovation.